Long-ago gifts still helping entrepreneurs

For San Antonio’s technology and life sciences communities, the contributions from three men who died between 2004 and 2015 still are boosting the outlooks for those industries because of their leadership and generosity.

This story was told at this week’s San Antonio Emerging Venture Pipeline quarterly luncheon. The main news is this: Another $1 million in early-stage investment money is available for area startup firms. That might not seem like much, but in this venture-capital parched part of the world, it’s a welcomed addition.

Gathered to hear the story during the luncheon attended by more than 200 people were the families of the three men: Robert McDermott, Tom Pawel and Glenn Biggs.

Connecting the three men is San Antonio’s nonprofit Texas Research & Technology Foundation.

McDermott, best known for building USAA into the insurance, banking and investment giant it is today, conceived of the TRTF in 1982 and was its first chairman.

Pawel helped make the foundation a reality when his family donated 1,500 acres in 1986 in West Bexar County from the family’s Concord Oil Co. On that land, TRTF built the Texas Research Park, which houses research tenants.

“Can you imagine a gift like that today?” asked Jim Dublin, TRTF chairman, while speaking at this week’s luncheon. “It boggles the mind, but they (the Pawels) believed in the dream and jumped in . . . Without the land, this simply doesn’t happen.”

In 2004 and 2005, longtime banker Biggs was the TRTF chairman. Biggs led prolonged deliberations among TRTF trustees who determined that unused land and property at the Texas Research Park should be sold to raise funds for operations and investments.

In 2006, the foundation sold 257 acres of the park’s land to the Texas General Land Office. Part of the proceeds of that sale, the total of which is undisclosed, was used to fund the $500,000 McDermott Pre-Seed Fund. The money eventually was invested in five initial companies at $100,000 each, selected from 180 applicants.

The proceeds also funded the start of the foundation’s The Texas Technology Development Center, or T3DC, which administers the pre-seed fund investments and organizes the quarterly Emerging Venture Pipeline luncheons that bring investors and startup entrepreneurs together.

Also from the 2006 land sale, the foundation invested $1 million, as the lead investor, into the Targeted Technology Fund I. That outside venture capital fund is managed by entrepreneur Paul Castella and has invested mainly in early-stage medical-device firms.

With the 2006 land sale proceeds eventually used up, TRTF trustees decided that a second set of sales should be undertaken.

In 2015, the park sold its 76-unit Pawel Apartments on 13 acres to a California investor and 158 acres to Microsoft Corp. for a $1 billion data center announced last year.

The sales prices remain undisclosed. But from the proceeds, the foundation has done two things. It has created an endowment to fund TRTF operations permanently. Secondly, the new $1 million investment fund will open this year and begin investing in early-stage San Antonio companies.

“We’ll invest some of the money in three or four companies this year. We’ll be real careful in who we invest. We’ll be ramping up at the end of the month,” said TRTF President York Duncan.

The size of the endowment has not been determined yet. “But it will be in the millions of dollars,” Duncan said.

The foundation is making sure the new endowment and investment fund circle back to the three men.

To honor McDermott, who died in 2006, the investment fund is named the Robert F. McDermott Legacy Investment Fund.

To honor Pawel, who died in 2004, the endowment funding TRTF operations is now named the Nancy & Tom Pawel Endowment.

To honor Biggs, who died last year, the foundation is donating $50,000 of the proceeds from the 2015 land sale to aging research programs at the University of Texas Health Science Center at San Antonio’s Barshop Institute for Longevity and Aging Studies, a tenant at the Texas Research Park.

David Hendricks joined the San Antonio Express-News in February 1976 after receiving a bachelor of journalism degree in December 1975 from the University of Texas at Austin. In 1981, he obtained a master's degree in English literature from the University of Texas at San Antonio. He worked seven years on various beats for the Metro desk before working in 1983 at the Express-News Capitol Bureau in Austin, returning to San Antonio later that year and joining the business section. Hendricks was business editor from 1986 to 1992 and started his business column in 1989. His column now appears twice a week. He also covers international business, chambers of commerce and CC Media Holdings Inc. Hendricks also contributes classical music concert reviews, book reviews and travel articles. He is married to Lucila Hendricks. They have a daughter, Emily.